Service providers such as management consulting, technology services, and outsourcing companies rely on service level agreements (SLAs) to provide contractual services to customers. As referred herein, a SLA is a negotiated agreement between a service provider and its customer for the former to provide one or more services to the latter at agreed-upon service level(s). The customer also may be another service provider. Thus, a typical SLA specifies the levels of availability, serviceability, performance, operation, financial incentives (rewards and penalties) and other desired attributes of the service(s) to be provided. To that extent, a SLA includes one or more service performance metrics with corresponding service level objectives (SLOs). Examples of service performance metrics (hereinafter, “SLA metrics” or “metrics”) include but are not limited to project milestones delivered or completed on time, critical projects completed on time, and different levels of incidents resolved with different predetermined time periods. As referred herein, a performance of a SLA metric (or SLA metric performance) is expressed as an achieved percentage of the SLO for such a metric. For example, a performance of 70% for project milestones delivered on time with a SLO that all project milestones be delivered on time would indicate that only 70% of all project milestones were delivered on time.
It is difficult for service providers to objectively evaluate and compare the risk of disparate and complex metrics in a SLA in order to predict or forecast their performance and associated financial risks to the service providers. While solution architects and service providers, through their experience dealing with past SLAs, are able to reasonably predict the mean and variability (e.g., standard deviation) of performance of SLA metrics over the lifespan of a SLA, they cannot predict the exact performance of a SLA metric on a desired periodic basis, such as a month-to-month performance.